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Oman: Amendments to FCIL

Oman: Amendments to FCIL

The Foreign Capital Investment Law replaced the Foreign Capital Investment Law of 1994 promulgated by Royal Decree Number 50 of 2019. The new law came into force on the 1st of January 2020.  

The most significant changes introduced by the new FCIL are as follows;

  1. Minimum share capital- the old FCIL required foreign-owned Omani companies to maintain a minimum share capital of RO 150,000; the new law has removed any such requirement on share capital. It further does not set any general limit the same. 
  2. Conditions and prohibitions- the new FCIL prohibits investment in certain activities in Article 14, the Ministry of Commerce and Industry is said to issue a decision stipulating the same. Further, Executive Regulations shall be issued to the new law that shall set out conditions and processes for issuing approvals, permits and licenses for investment projects. 
  3. Case by case basis application- the MOCI has proposed to apply the new FCIL on a case by case basis due to the absence of a clear regulatory framework. The MOCI is yet to lay down, in concrete terms, general and specific restrictions imposed on 100% foreign-owned companies. Further, MOCI is also required to lay down activities that will fall under the negative list's ambit. 
  4. Initial registered capital amount- regarding Omani LLCs under the new FCIL, investors who are desirous of hiring expat employees should be aware of the grading factors imposed by the Oman Chamber of Commerce and Industry (OCCI) for visa approvals. An LLC that does not meet the required grade, or is at a lower grade shall not obtain expat visas. 
  5. Shareholding percentage- the old law, imposed a general limit of shareholdings. A foreign investor should examine the terms of their shareholder agreements to check whether shareholdings can be increased beyond 70%.